Tuesday, October 30, 2012

Android ecosystem is rightly concerned about breadth and depth of Nokia's patent portfolio

Today's big patent story is a TechCrunch article speculating about the possibility of a Nokia patent application discouraging Google from implementing multi-user accounts on smartphones (while providing that functionality on tablet computers). I don't have an opinion on that particular hypothesis, but I am convinced that Nokia's patent portfolio is just too strong to be ignored by Google and its hardware partners. The most efficient solution would probably be for Android companies to take a license to Nokia's patents. My interpretation of Nokia's public statements is that it seeks to monetize its patents, and not to exclude.

There are several reasons for which I consider Nokia's portfolio to be fairly strong and reasonably valuable.

In June 2011 Nokia and Apple announced a settlement of a multijurisdictional patent spat that latest almost two years, and Apple conceded publicly that it came out on the paying end. This was a significant victory for Nokia.

The strength of a patent portfolio is largely a function of how innovative a company was (and how well it managed the patenting process) between five years back and 15 years back. That's because patent applications usually take several years to be processed. It doesn't always take five years, but sometimes it takes even longer than that. With a maximum term of validity of 20 years, it doesn't matter whether a company was in great shape in the 1970s or 1980s (example: Motorola). Even a patent that is 19 years old (counting from the filing date, not the date of grant) will expire in a year -- even in Germany, where you can get an infringement ruling in less than a year, you might not get to enforce it before it expires. So as a rule of thumb I would focus today on a company's innovative and patenting activity from 1997 to 2007. Nokia was very much at the forefront of wireless innovation, including pre-iPhone smartphones, during that relevant period.

In May, Nokia brought infringement actions in the United States and Germany against HTC, Viewsonic and RIM. The patents it selected for those lawsuits cover a broad range of technologies, reflective of Nokia's engineering tradition.

At this early stage one has to be careful about assessing the prospects of a patent enforcement campaign, but it's fair to say that Nokia is off to a good start. First hearings on three of its lawsuits against RIM have already been held in Munich. Dozens of other hearings (and some trials) will take place over the next six months.

In mid-August, the Munich I Regional Court appeared inclined to agree that a Nokia antenna patent is indeed quite broad.On Thursday (October 25) I attended hearings on a couple of other patents: EP1148681 on a "method for transferring resource information" and EP1474750 on a "method and system for storing and transferring multimedia tags". The '681 patent may be infringed when two BlackBerry devices establish a direct connection via NFC. I don't know whether there are any Android devices out there that infringe this patent. For the '750 patent on multimedia tags there definitely is an Android issue: Nokia is also asserting this patent against HTC in Mannheim.

Tagging multimedia data is a typical social networking function, and Judge Dr. Matthias Zigann, the judge presiding over several Nokia v. RIM lawsuits in Munich, realized that an overbroad interpretation of this patent would affect virtually every smartphone or tablet computer out there that provides access to social networks via WiFi networks. Nokia clarified that its infringement theory primarily relates to devices that come with preinstalled Twitter and Facebook apps. The court appeared reasonably receptive to that theory, and RIM was struggling to deny responsibility for the operations performed by such apps.

There was laughter in the courtroom when Judge Dr. Zigann said that the graffiti community also uses the word "tag" for a name left on an object and explained that he acquired his awareness of graffiti terminology when he was prosecuting graffiti artists as a district attorney in one or more cases earlier in his career.

But apart from that anecdote, the hearing wasn't fun for RIM. Its counsel outlined several non-infringement arguments but RIM's defense may ultimately depend on its ability to convince the court that this patent is very likely to be invalidated in a parallel nullity action.

Next month the Munich-based court will discuss three more Nokia patents, one of which it's asserting against HTC, Viewsonic and RIM in parallel. I will follow these litigations as they unfold. At this stage I believe Nokia is likely to win a significant number of infringement rulings against these defendants in 2013.

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