Tuesday, September 11, 2012

Apple seeks sanctions against HTC after inventor of two 4G patents denies that he knows his stuff

On Friday I commented on Bloomberg's report on the start of the ITC trial in the investigation of HTC's second complaint against Apple, which is, at this point, all about two patents allegedly essential to the 4G/LTE standard.

It appears that at least one very key witness -- Mr. Michael J. Geile, the inventor of those two patents HTC acquired from ADC Telecommunications -- was hesitant to contribute too much to the success of this evidentiary hearing. Apple is never one to be shy to bring motions for sanctions, but these three quotes from Mr. Geile that appear in a letter Apple sent to Administrative Law Judge Thomas B. Pender yesterday (and filed electronically today) are really astonishing:

"I don't think I'm qualified to say that – what the invention was in this."

"I'm saying that the attorneys will interpret whether there is [an invention] or not, that I'm not qualified to interpret that."

"I didn't feel qualified to directly interpret the claims in the patent to say what the invention was, what was in front of me at the time."

So there's a guy who is the named inventor on two cellular network patents, and when Apple's lawyer or the judge ask him about his claimed inventions, he says that this is for HTC's lawyers to answer. As a witness in an ITC investigation he actually has the same obligation as in federal court to say the truth, the whole truth and nothing but the truth. And he basically refuses to say anything substantive at all. He essentially says that he has no idea why he signed a patent application in the first place. The idea of a patent is not that somebody just provides input to lawyers who then take over: a patent is somewhat personal in nature, even if all essential rights are assigned to a company under an employment agreement.

From the outside, it's just a bit bizarre, but Apple is not amused. This witness is quite important in a critical context: the priority date of the patents-in-suit. HTC claims that the actual conception date is a date prior to the filing date. By claiming a pre-filing priority date, prior art that has a publication date during the 12 months or so preceding the filing date can be rendered ineligible. This kind of "swearing-back" is common for patents from the first-to-invent regime that was in place in the United States before last year's America Invents Act (now it's first-to-file like in Europe). But Apple argues that "Mr. Geile's refusal to testify as to the subject matter of his claimed invention necessarily precludes him from testifying about any conception of said invention", and it requests "that an adverse inference be drawn against HTC with regard to conception and reduction to practice". More specifically, Apple "requests that [Judge Pender] draw an adverse inference that HTC cannot show conception and supporting reduction to practice that would entitle HTC to a conception date that is prior to the effective filing date of the asserted patents."

In support of its position, Apple cites an ITC precedent according to which an inventor's refusal to testify about his understanding of the patented invention was deemed a "pattern of discovery abuse" that amounted to "obstruction of important and significant discovery".

When writing its letter, it was Apple's understanding that the ITC staff (the Office of Unfair Import Investigations, which participates in some ITC investigations as a third party) supported HTC's position that Mr. Geile did not have to answer those questions on the substance of his invention in order to be able to testify on the conception date. But the ITC staff does not make actual decisions. The ALJ is free to side with Apple on this one, and if he doesn't, Apple will probably appeal this issue to the Commission, the six-member decision-making body at the top of the ITC.

Since standard-essential patents could cause huge problems -- in this case also to the iPhone 5, which will be launched tomorrow --, this case is potentially more relevant than those in which HTC previously asserted patents against Apple. I don't believe the ITC will ultimately order an import ban over standard-essential patents, but if Apple could prove those patents invalid (though the hurdle is high), it would not even have to rely on a FRAND defense in a case that is particularly complicated because HTC and the original patent holder, ADC, never declared those patents to the relevant standard-setting organizations.

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