In May, Nokia sued HTC (as well as two other companies, Viewsonic and RIM) over various patents. Yesterday I expressed serious doubt about an unspecific FRAND defense that RIM raised against a couple of lawsuits Nokia had filed in the District of Delaware. Answers to federal complaints don't have to be overly specific, but
companies that raise a FRAND defense usually do state which patents they believe are essential to which standard(s),
Nokia made a clear distinction between standard-essential and other patents in its dispute with Apple, and
HTC is the target of FRAND abuse allegations by Apple.
For those reasons, I doubted that HTC had a good-faith basis for accusing Nokia of FRAND abuse. However, the situation is less clear than it appeared to be, and as a matter of fairness I do want to make sure that I report all the facts. In a response to Nokia's ITC complaint, HTC was far more specific. The ITC has different pleading requirements than federal courts.
I'm not saying that HTC's allegations are necessarily right, but they may be, and I'll watch the further process, which will provide greater clarity.
Besides the usual defenses against patent infringement claims (invalidity, non-infringement etc.), HTC raises certain patent exhaustion and FRAND defenses that are worth taking a closer look at.
Patent exhaustion defense
HTC believes that at least some of Nokia's claims are barred by the doctrines of patent exhaustion and/or implied license.
HTC points to a "Subscriber Unit License Agreement" that Nokia and Qualcomm concluded in 2001 and a subsequent agreement the same parties signed in 2008. HTC believes that "Qualcomm's authorized sale of chipset products substantially embodying Nokia's patents to HTC took these products outside of the scope of Nokia's patent monopoly and as a result Nokia can no longer assert any patent rights against HTC for products that include chipsets it purchased from Qualcomm."
HTC believes that the same applies to "similar agreements with other suppliers, such as Broadcom Corp. and Texas Instruments, Inc.", and to products "incorporating the Windows Mobile platform or any other products subject to a license or otherwise covered by [Nokia's] agreement with Microsoft".
HTC doesn't quote from any of those agreements, and the way in which its defenses are worded it probably just hopes that production of such contracts will provide HTC with a factual basis for this defense.
HTC's filing with the ITC specifically alleges that some of the patents-in-suit are (but were not declared) essential to standards that the European Telecommunications Standards Institute (ETSI) and the Open Mobile Alliance (OMA) developed. Allegedly, U.S. Patent No. 6,141,664 on "synchronization of databases with date range" and U.S. Patent No. 7,209,911 on "synchronization of databases using filters" are essential to the OMA Data Synchronization (OMA DS) specification and its implementations by ETSI, and U.S. Patent No. 5,570,369 on "reduction of power consumption in a mobile station" is essential to ETSI's implementation of GSM (the second-generation cellular network standard). But HTC says that Nokia and the previous owner of the two data synchronization patents, Puma Technology (later renamed to Intellisync) never declared those patents to the relevant standard-setting organizations.
Again, I have so far viewed Nokia as a company that honors its FRAND licensing obligations, and we'll see what comes to light during the course of this ITC investigation and the parallel federal Nokia v. HTC lawsuits. One thing is pretty certain to happen: Apple is going to point the United States District Court for the Eastern District of Virginia (where Apple brought FRAND counterclaims against HTC) to HTC's FRAND defense in the Nokia case. Apple could be a third-party beneficiary of this.
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