Tuesday, July 26, 2011

InterDigital sues Huawei, ZTE and Nokia over 3G patents

One week after putting itself formally on the selling block in the current mobile patent buying frenzy, mobile patent holding and research company InterDigital LLC (NASDAQ:IDCC) today announced an ITC complaint and a companion (mirror) federal lawsuit in the District of Delaware against Nokia (with which InterDigital is still embroiled in litigation that started years ago) as well as Chinese device makers Huawei and ZTE.

I have not yet seen the ITC complaint, but I have obtained a copy of the Delaware lawsuit. InterDigital's press release already listed the seven asserted patents, so I'm sure that I've seen the companion lawsuit to the ITC complaint. Patent holders often file federal lawsuits in addition to ITC complaints since the ITC cannot award damages.

InterDigital regularly sues mobile device makers in order to collect patent royalties. It's the normal course of business for a patent licensing company. However, it may not be purely coincidental that this latest lawsuit is filed only a week after InterDigital's announcement to entertain M&A proposals. The first potential acquirer to be mentioned in the media was Google. Asked by Reuters about this, I said that "Google must keep buying strategic patent assets", and I reiterated that position in a blog post earlier today on Google's General Counsel's criticism of the patent system. More recent reports also mention Apple. The bidding contest between those two rivals could bring about similar dynamics as the ones that drove up the price of Nortel's patent portfolio in a recent auction, but there are also important differences between a possible acquisition of InterDigital and the sale of the patent asserts in Nortel's bankruptcy estate.

Having looked at the complaint, I believe that InterDigital wants to demonstrate that it holds patents that it declares essential to a host of 3G-related standards. This approach would make sense for InterDigital with a view to the objective of signing license deals with the defendants, but in the current situation the complaint may also be a statement directed at potential acquirers.

Let's look at the asserted patents and accused products, and at the standards to which the patents-in-suit are allegedly essential.

The seven patents-in-suit

InterDigital asserts the following seven patents:

  • U.S. Patent No. 7,349,540 on "generation of user equipment identification specific scrambling code for high speed shared control channel" (application filed in 2004)

  • U.S. Patent No. 7,502,406 on an "automatic power control system for a code division multiple access (CDMA) communications system" (application filed in 2002)

  • U.S. Patent No. 7,536,013 on "user equipment identification specific scrambling" (application filed in 2007)

  • U.S. Patent No. 7,616,970 on a "dual mode unit for short range, high rate and long range, lower rate data communications" (application filed in 2006)

  • U.S. Patent No. 7,706,332 on a "method and subscriber unit for performing power control" (application filed in 2005)

  • U.S. Patent No. 7,706,830 on a "method and subscriber unit for performing an access procedure" (application filed in 2008)

  • U.S. Patent No. 7,970,127 on "user equipment identification specific scrambling (application filed in 2009)

The accused products

The first patent (the '540 patent) is asserted against Huawei and ZTE, but not against Nokia. The other six patents are asserted against all three defendants. Also, there are differences in the lists of accused products of a given vendor between the allegations for each patent.

Accused Huawei products:

  • USB Connect 900 (a 3G laptop modem sold by AT&T)

  • Comet U8150 (an Android smartphone marketed by T-Mobile)

  • Tap U7519 (a mobile phone running a Huawei operating system, with a Java engine)

  • Jet 2.0 (a 4G laptop stick)

  • S7 (an Android tablet)

  • Ascend M860 (an Android smartphone)

  • Ascend II (M865) (listed only for the '970 patent but might also infringe others)

  • M735 (a mobile phone with a touch screen, running on the Brew Mobile Platform)

  • M228 (a feature phone running a proprietary operating system)

  • M750 (a feature phone running a proprietary operating system)

  • Tap (a feature phone running a proprietary operating system)

Accused ZTE products:

  • WebConnect Rocket 2.0 MF691 (an HSPA+ laptop modem)

  • 4G Mobile Hotspot MF61 (a mobile modem/router)

  • V9 (a 7" Android tablet)

  • F160 (a feature phone with a proprietary operating system; marketed by AT&T)

  • Salute (a feature phone with a proprietary operating system, marketed by Verizon)

  • Peel (an iPod Touch accessory that connects Apple's portable music player to Sprint's 3G network)

  • Agent E520 (a feature phone running a proprietary operating system)

  • [Cricket] MSGM8 II (a feature phone running a proprietary operating system)

  • [Cricket] TXTM8 3G (a feature phone focused on messaging with a BlackBerry-like keyboard, running a proprietary operating system)

  • Fivespot AC30 (a mobile hotspot device marketed by Verizon)

  • [Cricket] CAPTR II/A210 (a feature phone running a proprietary operating system)

  • [Cricket] A605 (a USB wireless modem)

  • Essenze C70 (a feature phone running a proprietary operating system)

  • C79 (a feature phone running a proprietary operating system)

Accused Nokia products:

Those are different Symbian phones: Nokia N8, Astound C7, E7, 6350, E73, C6-01, C6, C5-03, C3-01, 6700 Slide, 6790 Slide, 3710, 2730, 5230 Nuron, E5, E71, X6, C2-01, 6790, Slide, and Twist.

Standards to which the asserted patents are claimed to be essential

All of the allegations make reference to 3G. There are differences between the various devices in terms of which standards they implement.

These are the industry standards the complaint makes reference to:

  • UMTS (WDCMA, CDMA2000)



  • HSPA+

  • Release 99

  • Release 4

  • 1xRTT

  • EV-DO

  • IEEE 802.11

The message is clear: InterDigital wants to demonstrate its purported capability to levy a patent tax on a wide range of devices and standards.

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