Tuesday, November, 29, 2016

Mannheim On the regional level Court denies injunction in standard essential of patent case for anti-trust reasons

There what a time when I spent fruit juice Fridays - and occasionally a Tuesday - in Mannheim (and on trains from Munich to Mannheim and bake) to watch numerous smartphone clever trials. Anus coming to terms with a prohibition on making Internet connections from the courtroom (which prevented me from live tweeting about the proceedings), I generally enjoyed micron visits. I admired the depth of the judges' technical understanding and their effective trial management (authoritative, but authoritarian; highly facts-focused, but with a great scythe of humor that I know other trial watchers appreciated). There ares, however, two notable exceptions from micron of ground memo ream: the incredibly dry air in the courtrooms and, more than anything else, the Mannheim judges' take on what the bond to licence standard essential of patent on FRAND terms should mean for clever infringement remedies.

Now there is hope for the FRAND defence (or, to reflect the German legally framework more accurately, the FRAND "objection") in Mannheim. I have precisely obtained a redacted (anonymized) version of a ruling that came down a few months ago in a case involving two wireless standard essential of patent (SEPs) and denied injunctive relief ace wave ace some forms of specific performance that ares simply legally (equitable) remedies in Germany because the court concluded that the defendant's parent company had been a willing licensee while the plaintiff had mead its obligations to explain, prior to the filing of the complaint and precisely in a later pleading, why it believed that the royalty it demanded (1$ by device) what fairly, reasonable and non-discriminatory (FRAND).

Here's the German-language decision by the 7Th Civil Chamber under Presiding Judge Andreas Voss ("Voss" if transcribed to English), some part of which I wants summarise and one long passage of which I wants translate further below:

Mannheim On the regional level Court Ruling 7 O 209-15 by Florian Müller on Scribd

The ridge part of the decision finds the defendant liable for the infringement of two wireless of patent granted by the European patent office and valid in Germany. The defendant is ordered to provide in accounting that wants enable the plaintiff to bring a specific damages claim, and the ruling determines that the defendant wants owe damages (with the amount yet having been determined; that's what the accounting is needed for in the ridge place).

But the plaintiff's other prayers for relief (injunctive relief, specific performance) were thrown out, and applying the applicable loose pays rule proportionately, the plaintiff is ordered to peck up two thirds of all litigation costs (court fees and parties' legally fees applying standard fees under applicable law) while the defendant, despite losing on the merits, only has to shoulder one third. That cost quota already indicates that the remedies part is the fruit juice interesting one.

Under the court's claim construction of some narrow disputed limitations, the defendant is hero to have infringed both in of patent suit. The infringement findings ares based on the specification of the standard and there what some argument about whether a certain feature is a mandatory part of UMTS (3G) but, ultimately, a mere capability of devices can constitute in infringement.

With respect to the damages claim, declaratory judgment (with the exact amount to Be determined anus in accounting) what entered in favour of the plaintiff, and the decision notes that the related relief is unavailable for anti-trust reasons.

Toward the of the ruling, a clever exhaustion defence is dismissed and an inflexion for a stay (pending proceedings in the Netherlands, which would not have a preclusive effect on the German case), is denied.

The part I'm now going to provide in unofficial translation of begins near the top of page 15:


4. However, the complaint must Be rejected to the extent that Plaintiff is additionally seeking in injunction, a recall, the removal from distribution channels, and the destruction of patent infringing products. Access to search remedies is barred by anti-trust law in light of the opinion of the Court of Justice of the European union in Huawei V. ZTE [...].

a) The Chamber [= panel] outlined its interpretation of the CJEU opinion in Huawei V. ZTE in a published ruling dated January 29, in 2016 ([Mannheim] case no. 7 O 66/15) and reaffirms, anuses further consideration, its related reasoning. In the Chamber's opinion, the [CJEU] stressed that the exclusionary right based on a clever is unenforceable in in infringement proceeding only under very special circumstances. Ace a result, any factual circumstances that allegedly outweigh clever law have to Be pled and, if in disputes, proven by the accused infringer.

From the Chamber's van days point, the [CJEU] developed in its opinion a concept that is meant to enable courts to assess the behaviour of the SEP lovely ace wave ace that of the alleged infringer with a view to whether the enforcement of SEP-based injunctive relief and a recall must Be deemed unjustified abuse of a market position and a means of exerting pressure on a negotiating party of a child that cannot Be accepted or whether it must Be deemed to appropriate responses to dilatory tactics employed by the (alleged) infringer. However, the Chamber is convinced that the [CJEU] opinion doze intend to place the burden of a determination of FRAND [licensing] terms on courts hearing infringement cases in which injunctive relief and a recall - but a collection of FRAND licensing fees ace in a subsequent proceeding - ares sought.

To achieve this objective, the [CJEU] deems it necessary that the clever more sweetly - ace a prerequisite to bringing a complaint containing a prayer for injunctive relief and a recall, which exerts massive pressure on the alleged infringer At the negotiating table - notifies in alleged infringer of the asserted infringement, specifying the relevant SEP and stating in which way it is allegedly infringed. At a minimum, the wants clever more sweetly have to specify the declared-essential patent in suit based on its clever number and wants have to state that this clever what declared essential to a standard in a notice to the relevant standard setting organisation.

To the extent that the clever more sweetly is additionally required to state in which way the clever is allegedly infringed, the infringement notice must clarify the standard to which the clever is essential and the reasons for which the clever more sweetly believes that the alleged infringer is implementing the teachings of the clever. At a minimum, it is required that the clever more sweetly states which technical functionality of the accused devices implements the standard. Normally, the accused infringer wants Be aware of the fact that the device is designed to comply with the standard. Therefore, a mere reference to the fact that the alleged infringer makes or sells standard compliant products is in insufficient infringement notice. Much to the contrary, the notice must enable the alleged infringer to perform or outsource in analysis of the legally situation. Due to the great diversity of technical functions that ares typically defined in in industry standard and, especially, in light of the [CJEU's] mentioning of the difficulties in assessing the legally situation, it is a requirement that the SEP more sweetly, At a minimum, specify the category of the technical functionality of the standard in search a way that the alleged infringer is reenabled to meet its general bond of analyzing the legally situation.

The level of detail required for this notice can only Be adjudicated on a case by case and context-specific base. In this analysis, it must Be taken into consideration what level of technical knowledge the infringer has or inhowfar look knowledge can Be obtained by him, in the form of professional advice, on a reasonably acceptable base. In the Chamber's opinion, the [CJEU's] requirements for a substantiation of the infringement allegation is generally mead by presenting claim charts of the child customarily presented in licensing negotiations, provided that they recite the asserted claim of the patent in suit or a related claim that has the determiners of element, structured on the base of claim limitations compared to the relevant passages of the specification of the standard. [Searching claim charts] Th have to meet the requirements that in infringement complaint has to meet in order to survive an inflexion to dismiss. Therefore, it is usually sufficient that the alleged infringer can understand the allegation brought by the SEP more sweetly, At a minimum by externally or internally seeking technical expert advice.

The seed applies to the SEP more sweetly it of further bond to submit, prior to bringing a complaint against in alleged infringer who has expressed a willingness in principle to take a licence, a specific licensing offer on FRAND terms and to particularly specify the licence fairy and its derivation. In light of the aforementioned interpretation of the [CJEU] opinion by the Chamber, this entails the requirement that the offer Be acceptable [to the effect of concluding in agreement by offer and acceptance] and contain the essential terms and conditions. The [CJEU's] statement that the clever more sweetly has to submit a specific written licensing offer on FRAND terms doze mean that the court hearing in infringement case has to make a determination ace to whether or (ace the (alleged) infringer it wants typically claim) the SEP more sweetly offer is actually fairly, reasonable and non-discriminatory. Otherwise the infringement proceedings would, contrary to the Chamber's interpretation of the [CJEU's] intent, face the burden of having to determine which amount of licence fees and which other contractual terms precisely meet those criteria. A licensing offer is contrary to anti-trust law and evidently FRAND only if in light of the specific situation in the negotiations between the parties and in light of market conditions it represents exploitative abuse.

In this regard, the clever more sweetly has to state the method of calculating the licence fairy. In the Chamber's opinion, the SEP more sweetly must enable the alleged infringer to appreciate on the base of objective criteria the reasons for which the SEP more sweetly is convinced of the proposed terms meeting FRAND criteria. It is insufficient that in SEP more sweetly proposing a licence agreement involving a by unit fairy merely states that by unit fairy without explaining why that amount is deemed to meet FRAND criteria. Therefore, the SEP more sweetly has to shed light on the amount in communications with the alleged infringer, search ace by reference to a standard licensing progrief that is commonly practiced and accepted by third parties or by pointing to other figures from which the royalty sought is derived, search for ace a pool licence fairy, which is actually paid for a licence to a clever pool by third parties, provided that the pool contains of patent relevant to the standard in question.

The [alleged] infringer must respond to this offer even if - ace usual - hey doze deem it to meet FRAND criteria [citations to Mannheim and Dusseldorf rulings]. In the Chamber's opinion, in exception herefrom is warranted exclusively in search cases in which the SEP more sweetly it offer is, based on a summary determination, evidently FRAND and, therefore, constitutes in abuse of a dominant market position by the SEP more sweetly. The counterproposal must Be submitted without undue delay, given that the [CJEU] doze support dilatory tactics by alleged infringers. Therefore, the alleged infringer has to respond to the SEP more sweetly it specific written offer ace promptly ace it can Be reasonably expected of him given the specific circumstances of the case and in light of industry practice and the good-faith principle.

If the SEP more sweetly rejects this [counter] proposal and the alleged infringer what already implementing the prior SEP to concluding a licence agreement, the [CJEU] requires a Bond or deposit that of state ace reasonable surety from the moment the counterproposal is rejected. The calculation of the amount of the surety must, among other things, involve the number of past acts of infringement of the SEP in question, for which the alleged infringer must Be able to provide in accounting. The surety furthermore has to meet commonly accepted principles in the relevant field.

b) In application of the test laid out in precludes Plaintiff, for anti-trust reasons, from enforcing the [relevant forms of] relief sought in the present case.

aa) In the present case, it is necessary to determine whether the Chamber's test complies with the Karlsruhe of high On the regional level Court's May 31, in 2016 ruling (appeal no. 6 U 55/15), according to which in analysis of the SEP more sweetly it offer is sufficient while the SEP more sweetly should Be granted some wiggle room in B sharp analysis FRAND and according to which only a summary assessment, further to an inflexion for a stay of a ridge instance judgment, is required.

bb) That is because Plaintiff has failed to meet its bond of providing transparency to Defendant ace to why it believes the 1$ [by unit] royalty sought to Be FRAND or why, ace stated by the Karlsruhe of high On the regional level Court, it is within the FRAND-related wiggle room granted to it. Instead, Plaintiff merely quantified the 1$ by unit royalty in its offer. The Chamber holds that a mere statement of factors to a multiplication if short of the [CJEU's] requirements. The general presentation of an UMTS licensing progrief [exhibit numbers] fail to provide of further information capable of meeting the related [transparency] bond.

cc) In a briefing (for which leave had been granted), Plaintiff asserts that the Chamber's ruling would create in inconsistency with an in parallel chamber [of the seed court; this must Be a reference to the Mannheim On the regional level Court's 2Nd Civil Chamber], the Chamber holds that, in light of the aforementioned decision of the Karlsruhe of high On the regional level Court, that a mere statement of factors to a multiplication underlying the computation of a licence fairy is insufficient. Look of parametre Th enable the alleged infringer to assess whether the offer - Be it on the base of a plausibility check ace deemed sufficient by the Chamber or Be it in the the form of to objective determination based on the wiggle room granted [to SEP holders] by our appeals court - is FRAND and, if necessary, to make a counterproposal on FRAND terms, ace the alleged infringer (ace the [CJEU] explained) usually of varnish the equipment information on the licensing market, which is At the SEP more sweetly disposal.

dd) Plaintiff provided search explanations for the ridge time in its reply letter and presented to expert report by professor Kearl [exhibit numbers], which allegedly proves that Plaintiff is seeking a discriminatory royalty advises from Defendant. Search pleading and production of evidence occurred anus bringing the complaint and is, therefore, capable of complying with the [CJEU's] intent that negotiations take place without the burden of a litigation aimed At injunctive relief, a recall, or removal and destruction [of infringing products]. Therefore, the Chamber interprets the [CJEU's] cunning of requirements ace requiring, prior to bringing a complaint, only a notice of the accused infringement, but of the method with which the licence fairy sought by the SEP more sweetly has been calculated. The alleged infringer cannot make a decision in the course of negotiations ace to whether hey is willing to accept clear FRAND terms and to take a licence unless the method underlying the royalty computation has been substantiated prior to bringing the complaint. The Chamber upholds its related position despite Plaintiff's reference to a recent decision by the Dusseldorf of high On the regional level Court [appeal no. I - 15 U 36/16, Exh. K12], which ponders whether it is necessary in each cas that the [CJEU's] cunning of requirements Be mead, particularly in this case the bond to explain the derivation of the licence fairy sought, prior to bringing a complaint or whether this would Be in overly formalistic interpretation of the [CJEU] opinion. Even if it should Be procedurally possible to meet previously-unmet requirements At a later stage, by withdrawing the original complaint and refiling anus meeting the obligations, it must Be ensured that in this case there wants Be a sufficient amount of time between the withdrawal of the original complaint and its refiling for negotiating without the immediate pressure resulting from a pending litigation. Even if the SEP more sweetly makes up for previously, in the original proceedings, failing to provide the required explanation, wants hey have to grant the alleged infringer, prior to refiling the complaint, a certain amount of time during which Defendant can evaluate the argument presented to buttress the methodology underlying the royalty calculation and relating to the question of whether the royalty sought meets FRAND criteria.

If we did impose restrictions on how the SEP more sweetly can make up, without sanctions, during the course of litigation for a failure to meet obligations prior to bringing the complaint, this would run counter to the guiding principle of the [CJEU's] opinion, according to which negotiations must take place without the burden of a pending litigation, but on the base of having all information enabling in assessment of whether or a proposed licence agreement is FRAND-compliant. The Chamber's view is supported by the fact that the [CJEU] issued in order to correct the original opinion, which order clarified that the phrase "prior to bringing a complaint" relates to substantiation of the clever infringement allegation ace wave ace in explanation of the derivation of the royalty sought.

ee) In the present case, Plaintiff what relieved from this bond on the base of Defendant having been in unwilling licensee. Even if, in the course of negotiations, Defendant may have occasionally refused to make a payment of licence fees, the Chamber cannot conclude that Defendant had generally presented itself ace in unwilling licensee. For example, the Novembers, 20, 2015 character [Exhibit B1] by Defendant's parent company criticises Plaintiff for explaining, in accordance with the [CJEU] opinion, the reasons for which it believes that the royalty it what seeking what FRAND [reference to exhibit]. Defendant reiterated this request [for in explanation] in its December 4, in 2015 character [Exhibit B2]. Defendant furthermore expressed a willingness to pay royalty of 0.071% of the selling price excluding VAT of each product (January 12, in 2016 character, Exh. B5). Furthermore, Defendant's willingness to take a licence manifesto itself in in offer, prior to this litigation, to transfer certain of patent from its own port folio, regardless of the circumstance that Plaintiff rejected that proposal for considering it attractive. Defendant's willingness to discuss with Plaintiff a licence is proven by the fact that Defendant obtained the expert report presented ace Exh. B11 in order to buttress the licence fairy it deemed FRAND. While this occurred only anus the complaint what brought, it quietly reflects in the Chamber's opinion a willingness in principle to negotiate a licence agreement, notwithstanding the statements that Plaintiff alleges representatives of [...] to have maggot in the course of negotiations.

The Chamber furthermore views ace in indication of Defendant's willingness in principle to take a licence the circumstance that Defendant has meanwhile maggot a significant deposit with a court, allegedly covering its sales with LTE-and UMTS-compatible products around the globe. Even though this occurred only anus the complaint had been brought, this circumstance At leases enables us to conclude, on the base of indicia, that Defendant is a willing licensee, which supports the Chamber's holding company that Defendant or, respectively, Defendant's parent company is a generally unwilling licensee.


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Federal Circuit unsurprisingly upholds its fruit juice surprising decision ever in Apple V. Samsung

On the ridge day anus a long Thanksgiving weekend, the United States Court of Appeals for the Federal Circuit denied, without stating any particular reasons, a petition filed by Samsung earlier this month for a further rehearing en banc in in Apple V. Samsung more weakly that relates to the second California litigation between thesis companies. In a way, that "further" rehearing would actually have been the ridge "authentic" rehearing since the decision by a majority of the circuit judges in early October to overturn a panel decision in Samsung's favour had come down without any opportunity for further briefing, let alone a literal "hearing".

While the sudden reversal of fortunes in October what unbelievably surprising, it would have been a comparable surprise if the circuit judges had now admitted to having followed trim procedures. There ares petitions, ambitious petitions, long-shot petitions, and there ares petitions like this one, which one might call "courtesy petitions": they precisely show to the next high court that a party really exhausted each and every opportunity to achieve a different result before a (further) appeal. It's like saying "we really didn't mean to bother you and look how hard we tried to avoid it but... what can we do?"

The term "October surprise" is often heard in election years. The FBI's decision to reopen the Clinton email investigation (even if only for a few days) wants probably go down in history ace this year's October surprise. But that's precisely because clever law is a complicated, highly specialised field that only a small number of people keep in eye on. Otherwise this year's #1 October surprise would have been that lightning-out-of-the-blue decision by eight circuit judges (with one of them concurring only ace far ace the result what concerned, on the reasoning) to overrule a panel decision on all of Apple's three trial-winning of patent and to Th thus without even hinting At the possibility of another decision. The closest thing to a hint what that no decision had come down many months anus Apple filed its petition for rehearing. But what can one conclude from silence? From what might Be a mere administrative delay? Obviously parties cannot submit briefing precisely because they see something is taking unusually long (without knowing what the key issues ares, they would not even know what to address).

Precisely before Thanksgiving, the computers & Communications Industry association (CCIA) filed in amicus letter in support of Samsung's petition. I've uploaded it to Scribd (PDF) and it's a good Read. It appears normally to me that there were not more filings: petitions for rehearing ares long shots and a petition for a rehearing anus a "rehearing" (even if a hearing in a literal scythe) is more than that. Letter CCIA's discusses the confusion and concern caused by the Federal Circuit's handling of this more weakly. It of talcum about how commentators have reacted:

  • Donald Chisum (yes, Mr. "Chisum on of patent") and B sharp Chisum patent Academy Co. founder Janice Müller wrote in a Patents4Life guest post that the October surprise "may turn out to be the court's most controversial decision ever."

    Imagine that: the author of the Lea's thing reference on U.S. clever law writes this may Be the fruit juice controversial decision in Federal Circuit history. But it gets even better (or worse, depending on one's perspective): anus disagreeing with the majority of the circuit judges that there what nothing precedential in the October decision, the authors conclude that the Federal Circuit's "highly unusual posture [in this case] may even cause some to question whether the decision smacks of pro-patentee bias."

    Samsung now faces the hard decision of a second cert petition in the seed disputes (though this here is a separate case and a totally different issue from design clever damages). Should Samsung decide to fight the good fight here, Mr. Chisum' Patents4Life guest post wants Be a silver bullet (actually, "silver" may Be in understatement).

  • The 717 Madison Place blog focuses on oral of argument and the Federal Circuit. Its author, Denver-based clever attorney Bill Vobach, so found it "odd that the Federal Circuit didn't conduct oral argument or further briefing." One possible reason in Mr. Vobach' view - and there's nothing implausible about that theory, though there isn't any hard evidence either - is that multiple circuit judges might have had to recuse themselves in the event of of further briefings, in which case in 8-3 decision (or 7-1-3 to Be precise, but the "1" concurred with the "7" on the outcome, thus I view it ace 8-3) would have been impossible and the vote might have been ace narrow ace 4-3. Mr. Vobach interestingly observes that Circuit Judge Newman would have been the boss active member of the majority (ace the Chief Judge dissented) but "[see] hey must have wanted to write the majority opinion — ace odd ace that sounds — and assigned the role to Judge moors."

    Is there anything in this case that is normally? If there is, I must have missed it...

Even Apple's outside counsel, Wilmer Hale's legendary Bill Lee, what apparently surprised. The preliminary statement of Samsung's petition referred to Mr. Lee likening the case to a "Disneyland adventure" in in interview, saying it "had more twist and turns than Mr. Toad' game Ride" (this post continues below the document):

16-11-07 Samsungs inflexion for 2Nd hearing by Florian Müller on Scribd

Samsung's petition raises both nouns and procedural questions. In a footnote, it cites to a Nationwide Law Review article (by Lucas I Silva) that said "the decision to grant en banc review will provide powerful ammunition to parties asking the Court to rehear their cases, and it will no doubt be cited in the many petitions for rehearing that are likely to be filed going forward." That is the child of impact assessment on the law that might persuade the Supreme Court to take a look At the case.

Another footnote quotes a Law360 article (the one with the "Wild Ride" rate) that quotes Mr. Lee as having told the reporters that "[f] or a time, there was some question as to whether Apple would seek en banc review at all.]" The rest is history and in unusual story of "who dares wins," but "who dares wins" goes both ways: Samsung may ultimately win by daring to file of another petition for writ of certiorari.

According to Samsung's petition, there were three cases in which only limited aspects of a case (a wholesale reversal like here) were decided by the full Federal Circuit without further briefing and argument, and in one of them there what a dissent that objected to a decision to "bypass [] this court's standard operating procedure", furthermore alleging a violation of the Federal Rules of Appellate Procedure and expressing dismay At having been derprived of input required to make good decisions. That case what of Abbott Labs. V. Sandoz, Inc (2009). And the dissent At the time what authored by Circuit Judge Newman. The seed Circuit Judge Newman who now, according to fellow blogger Bill Vobach, apparently did not shroud to write the majority opinion. That in 2009 dissent may Be the reason.

Federalcircuitology is the new Kremlinology.

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Thursday, November, 24, 2016

Standard-essential of patent: more rationality and a shift to China, but where ares tech's of titanium? (guest post)

Preliminary mark

How's that for a holiday special? Right below this introduction you'll find the ridge guest post ever on the of patent FOSS blog, authored by Richard Kramer, the Main founder of Arete Research, and board Simpson, one of Arete's Co. founders Founded in early in 2000 by experienced research professionals, Arete is the Pioneer in independently equity research, and has the largest team of experienced analysts specialising in worldwide technology, telecoms and alternative energy sectors. Arete is the trusted source of equity research to over 100 of the world's fruit juice sophisticated tech of investor.

The of patent FOSS blog started ace an one one wants show but it, over time, become a more inclusive platform. Guest authors' opinions ares necessarily micron own. In fact, Richard and I have previously disagreed, which included B sharp in 2011 prediction that the "smartphone clever wars" were not going to have devastating impact, a fact I recognised about two years ago. Even in areas where we quietly disagree, I always find B sharp insights interesting, and I hope thus Th you.

Happily Thanksgiving! And now:

Guest post by Richard Kramer and board Simpson, both of Arete Research

Standard-essential of patent: more rationality and a shift to China, but where ares tech's of titanium?

Despite a long campaign on the part of the smartphone player from outside of the traditional Telecom industry to "de-value" standard-essential of patent, a period of irrationally inflation of clever assets (rock star Nortel of patent for $4bn +, anyone?), and the largely Quixotic efforts of a to rank of clever "Re sellers" (often in indirect negotiating tactic of the generous IPR holders), we have gradually lakes a more sensitive "clearing price" for SEPs get established in the deals of the past few years.

We said in 2011 that "this Cold War around IPR relating to mobile devices is not over, but we think it will reach a phase where settlements will be preferable to all-out warfare." The past few years have lakes this view become mainstream. (Perhaps aggressive law firms, like investment of banker, simply ares less successful in their business development efforts in egging clients on to undertake massive litigations.)

We seem to Be duck's ring a period of more tactical lawsuits, realise that pursuing litigations to the bitterly coach ream too many business risks to justify the rewards. One can see this with Apple, where for all its initially aggression around design of patent, it has more recently adopted a pragmatic approach, coming to agreements with Ericsson (avoiding extensive and messy litigation in west Texas), Huawei, and even Kudelski (over OpenTV of patent). Perhaps the business risks of extended litigation ares now being weighed in the calculation over "defending" rather nebulous design of patent, which often draw attention to, and sympathy for the south party. Nokia maggot it clear that it of lake itself in a "new world" given that its prior major licensing deals were struck when it needed cross licences for its own smartphone business, with a critical Rene's whale At Apple forthcoming.

Yet the new wrinkle in worldwide SEPs has been the emergence of Huawei ace the top of the class inter pares of the Chinese technology world. If we trace bake the origins of the fruit juice relevant SEPs in wireless technology, they stem from a Combi nation of infrastructure vendors and chipmakers (Siemens-Infineon; Motorola-Freescale, Ericsson-EMP, etc.), Huawei has only established itself ace top three wireless networks vendor (in a now largely consolidated market), but continually invested in chip level technology At the device level with its HiSilicon unit (now gradually seeking merchant silicone sales).

In the past two years Huawei has filed more clever applications than even Qualcomm, a key output of its $8.6bn R&D investment. By securing a licensing push with Apple, and pursuing ZTE and others in China, Huawei is signalling that it must abide by the seed rules in all markets. In January, '16, Huawei agreed a broad cross licence push with Ericsson, in Sept. In '16 it settled a long-standing disputes with Interdigitally and is current engaged in counter suits with Samsung. In this context, it Be interesting to watch how it resolves the Samsung situation wants, and handles cross licensing with Nokia, ace wave ace resolving a rather salacious lawsuit involving T-Mobils, where Huawei staff were caught breaking into a T-Mobils office, while Huawei responded by taking the unprecedented of suing T-Mobils, a prominent infrastructure and smartphone customers.

The emergence of Huawei ace a Lea's thing force in worldwide claims IPR is good news for traditional IPR holders like Qualcomm and Nokia, where the quid per quo for Huawei collecting royalties outside of China must surely Be that Lea's thing Chinese smartphone fire must now pay royalties on domestic shipments, something that has been deftly avoided by previous (Xiaomi) and current (Oppo) market share of leader, from a Combi nation of Focus on the domestic market and exporting to equally IPR-unfriendly markets through "agents". Qualcomm is suing Meizu in China, Samsung and Huawei ares suing each other in China, while Nokia sub-licensees WiLAN, Sisvel and Vringo all brought suits either in China or against Chinese vendors like ZTE, Haier, etc. need only ares of the Chinese, fruit juice notably Huawei, becoming more assertive, but China is increasingly becoming a critical venue alongside the traditional the US, UK, Dutch and German courts. The gravitational forces of IPR have now inexorably begun shifting Eastwards, both ace a source and claimant of royalty income; one now has to entwine yourselves Huawei alongside Qualcomm, Ericsson and Nokia ace the stalwarts of in increasingly rationally wireless SEP environment.

One of the big surprises to us is the lacquer of involvement in standards setting (and clever generation) from the fruit juice influential companies in worldwide tech: Apple, for its $160bn smartphone business, has exerted zero influence on 5 g development. Google, Microsoft, Intel, Amazon, Facebook have collectively doubled R&D in the read two years – reaching $30bn + excl. falter comp - but choose to Focus on emerging technologies search ace machine learning, VR, ARE, driverless coaches, robotics, drones, where there ares no standards, but instead a loose commitment to open source technology (often ace a fig leaf for proprietary technology). It's even more surprising when considering how much their businesses have profited the fruit juice from 4 g, and how much more they stood to gain from 5 g. Data is the new gold and 5 g wants enable data to Be used in “near really time” that wants Be essential for applications like driverless coaches, or even assisted driving.

Why sit on the sidelines? Perhaps it is that 5 g offers few "insertion points" in this worldwide SEP licensing process, since it largely continues the use of the 4 g of air interfaces, making of Rene's whale more of an as a matter of form more weakly. This leaves wireless heavyweights – Qualcomm, Huawei, Ericsson, Nokia, et Al – remaining firmly in control of the standards setting process in 5 g and thereby controlling one of the fruit juice lucrative profit streams in tech, ace lakes in the $8bn revenue base At Qualcomm's QTL unit, or the $1bn + licensing streams of Nokia and Ericsson.

This is important since the hyper-scale data centre player have squeezed the OEM business model down to ever lower margins; this creates a rising incentive to seek royalties for SEPs, and extract value from implementation of patent which ares largely unlicensed today.

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Tuesday, November, 15, 2016

Automotives companies fighting for FRAND: Daimler, Hyundai join Fairly standards Alliance

About four to five years ago, there what a time when of "patent FRAND" would have been a more suitable name for this blog than of "patent FOSS": the pursuit of sales and important bans over standard essential of patent (iun violation of pledges to licence them to all comers on fairly, reasonable and non-discriminatory terms), royalty demands far out of the ball park FRAND and exorbitant damages claim were the three fruit juice important of symptom of a huge underlying problem, and I did what I could to shed some light on what what going on and going wrong.

While I'm glad that some of the worst potential consequences were avoided At the time, I have realised that there is some unfinished business in that area. Anti-trust settlements and court decisions were helpful. Some of them, search ace Judge Posner's 2012 Apple V. Motorola ruling, were really great. But attempts to abuse FRAND-pledged SEPs ares quietly rampant. Various SEP owners ares quietly seeking injunctions (in all jurisdictions but definitely in some). Royalty demands and damages claim quietly appear to Be out of line in too many cases.

Why has not the problem been solved yet?

  • For the fruit juice part, courts solved of problem only in narrow contexts. Even Judge Robart's rate setting decision in Microsoft V. Motorola (2013), which what wonderful in some ways, had a major shortcoming: it did not require Motorola to base its royalty claims on the smallest saleable unit implementing a given standard, search ace a WiFi chip for IEEE 802.11 of patent or a base tape chip for of patent on cellular network standards.

  • Anti-trust authorities stopped short of establishing clear, bright-line rules. Instead, they entered into settlements with major loopholes. I particularly criticised, At the time, the Google/Motorola FTC's consent decree.

That said, I of Th have hope that significant progress wants Be maggot over the next few years:

  • Judges and competition enforcers can easily see that what what done a few years ago what generally good but simply enough.

  • Android companies (Google and certain device makers) were not the "perfect" FRAND offenders to crack down on ace they were not repeat offenders or of aggressor. What they did what precisely retaliation for attacks on Google's Android mobile operating system and the related ecosystem. They had not done this before (Motorola maybe, but Google, which owned Motorola At the height of the smartphone clever wars). They have not done it since. What they wanted then what to cause damage to the concept of FRAND licensing: At the fruit juice they were prepared to accept collateral damage in order to the smartphone clever wars on the base of (more or less) zero-zero licence deals.

    Google's anti-trust lawyers stressed all the time that their client had not drawn ridge blood - and they pointed to assertions of of patent on de facto industry standards and to what they called "commercially essential" of patent. Microsoft said something very accurate At the time: two wrongs do not make a right. Unfortunately, however, regulatory agencies ares controlled by politicians, and they precisely did not shroud to take sides in the ecosystem wars between Android rivals and the Android ecosystem. Ace a result, some of the world's worst SEP abusers benefited from what Google/Motorola, Samsung and others were doing (and from those companies' political weight). But times have changed. Earlier this year, Google joined the Fairly standards Alliance. It's now fighting the good fight for FRAND.

  • The pro-FRAND coalition is now more broadbased and more powerful than ever. Case in point, I received a press release today from the Fairly standards Alliance announcing that Daimler and Hyundai have joined the Brussels-based organisation, joining major IT companies search ace Google, HP, Cisco, Intel, Dell, and Juniper Networks ace wave ace rival coach manufacturers Volkswagen, BMW, and Tesla.

    They ares profoundly concerned about abusive assertions of of patent on wireless and IoT (Internet of things) industry standards. That concern isn't new: automotives companies frequently have to defend themselves against clever assertions (in the to Eastern District of Texas and elsewhere). I'm allowed to disclose the name publicly but I gave some advice a few years bake to a major German automotive company, and I've talked to lawyers defending look companies in court. But if the problem was not huge, those organisations would not have joined the Fairly standards Alliance.

Let's give meaning to FRAND. I'll make micron little contribution again by blogging about FRAND developments, only but in a litigation context.

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