Friday, March 4, 2011

ITC votes to investigate LG's complaints against Sony over the PlayStation 3 game console and certain Bravia digital TV products

On February 4, 2011, LG filed two simultaneous complaints against Sony with the US International Trade Commission ("USITC", or just "ITC"), a US federal government agency with quasi-judicial powers. The two complaints asserted four different sets of four patents: the PS3 complaint alleged the infringement of four patents related to the Blu-ray Disc format, while the patents asserted in the digital TV complaint (which specifically accused various Sony "Bravia" devices) cover Web TV, HDTV and similar technologies.

The complaints asked for import bans that would effectively preclude Sony from selling those products into the all-important US market, with disastrous consequences not only for its sales production but also for its longer-term market position. Such a decision could come within 16-18 months.

The ITC just announced that it voted to look into both complaints in one consolidated investigation. The new investigation number is 337-TA-764. As the ITC pointed out, this is just the launch of an investigation -- not a decision on the merits of the complaints. The ITC previously also voted to investigate a Sony complaint against LG, as I reported a month ago. I haven't seen any case in which a complaint lodged by one major company against another would have been dismissed at this early stage.

The ITC's announcement doesn't state the reasons for a consolidated investigation of both complaints, but I can see why the ITC chose to combine them. Even though the asserted patents and accused products in both complaints don't have any overlap, both were filed on the same day, were filed by the same complainant (LG Electronics, Inc. of Korea), and named three entities as respondents (Sony Corporation of Japan, New York City-based Sony Corporation of America, and Sony Electronics, Inc. of San Diego, California). The PS3 complaint additionally named Sony Computer Entertainment, Inc. ("SCE") of Japan and Sony Computer Entertainment America, LLC ("SCEA") of Foster City, California as respondents, but the ITC has already launched other investigations in which one or more of the respondents are accused of infringing only some of the asserted patents.

For example, ITC investigation no. 337-TA-710 is another consolidated investigation: in that one, HTC and Nokia have to defend themselves against patent infringement allegations by Apple. Four of the nine patents were asserted only against HTC but not Nokia; Nokia, however, faces infringement allegations over four other Apple patents in a different investigation (no. 337-TA-704). (In December I published an overview of smartphone-related ITC investigations.)

I mentioned Sony's complaint with the ITC over various LG smartphones. That one was filed in late December 2010. Previously the two parties were already litigating against each other in US federal courts. LG's ITC complaints appeared to come in retaliation for Sony's ITC complaint, and LG brought about further escalation by requesting customs action and, apparently, a preliminary injunction against Sony in the Netherlands, the key entry point for all PS3 shipments into Europe. I commented on this a few days ago (the post was also published on The Guardian's Technology Blog) and said I expected Sony to look for ways to take advantage of Europe's fragmented patent system by shipping into the EU via other member states.

Meanwhile a Reuters report quotes an unnamed person familiar with the matter as confirming that Sony "does not expect its regional sales to be badly affected by the temporary ban." As Reuters and Bloomberg report, Sony is also evaluating its options to have the Dutch decision overturned.

In other words, no signs of giving up. At some point they'll negotiate a settlement, I'm sure -- but it may take a while.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Share with other professionals via LinkedIn: