Sunday, November 25, 2012

Google loan patents received special treatment under Apple-HTC settlement

On Wednesday I reported on a few of the terms of the Apple-HTC settlement agreement. I now have three follow-up items on the lawsuits that have been or are about to be dismissed as a result of the deal:

  • Among the European patents Apple was asserting against HTC in Germany, I identified four patents that did not previously show up in court against Android companies, but three of them were asserted against Nokia. The fact that Apple was asserting them against HTC suggests that it may be asserting them against other Android device makers (Samsung and Google's Motorola Mobility) as well, or at least increases the likelihood of future assertions.

  • HTC subsidiary S3 Graphics was asserting two European patents against Apple in Germany, and it used them in three courts each, suing Apple itself in Mannheim and, over the same two patents, major nationwide Apple distributors in D├╝sseldorf (ComLine GmbH) and Munich (GRAVIS).

    The fact that S3G was suing Apple in Germany was mentioned by counsel for HTC in open court in April, and I reported on it at the time. But no details were available then. The two patents are EP1034505 on a "system and method for for fixed-rate block-based image compression with inferred pixel values" and EP1066600 on "block- and band-oriented traversal in three-dimensional triangle rendering". The second one is the equivalent of U.S. Patent No. 5,945,997, which S3 Graphics also asserted in its second ITC complaint (and a companion federal lawsuit) against Apple. The approach of suing Apple as well as two distributors, bringing six lawsuits against the same products over only two patents, takes advantage of the fact that German courts, unlike their U.S. counterparts, don't order consolidation across venues for judicial efficiency or convenience reasons. If two or more lawsuits are completely duplicative, all actions but one will be dismissed. Mere overlaps, however, don't have that effect. You can sue a vendor and a reseller, in the same court or in a different court, and technically those are separate actions.

  • In my previous post on the terms of the settlement, I wrote that "the dismissals of the parties' various U.S. [and German] actions will be dismissals without prejudice". It's correct that Apple and HTC will be able to reassert their own patents-in-suit against each other, to the extent that the settlement agreement does not preclude this. In addition, I wish to clarify that a few loan patents from Google, to which HTC apparently never owned all of the substantial rights, are dismissed with prejudice. I will provide a complete list of the dismissal wordings, and some explanations, further below.

Four European Apple patents previously not known to have been asserted against Android devices

By the time of the settlement, Apple had stepped up its German litigation against HTC considerably. Apple brought three German actions against HTC in 2011, and seven more in 2012. Of those ten patents, I knew that four were being asserted against HTC because I attended hearings and trials. Of the other six patents, I saw two more in action against other German Android device makers and just didn't know they were also being asserted against HTC. But there are also four patents that weren't previously known to be or have been asserted against Android device makers. Three of those four patents were, however, asserted against Nokia in Germany but those lawsuits never came to judgment due to a June 2011 settlement.

These are the three patents previously asserted against Nokia:

  • EP0719487 on an "object-oriented telephony system"

  • EP0760131 on a "method and apparatus for distributing events in an operating system"

  • EP0664021 on a "menu state system"

The fourth patent, which was not asserted against Nokia (at least not to my knowledge), is EP0769169 on a "network component system". It's related (but far from identical) to U.S. Patent No. RE39,486, which Apple was also asserting in an ITC action against both Nokia and HTC.

If Apple believes that HTC's devices infringe those four patents, then it almost certainly believes so with respect to Samsung and Motorola, and assertions against those two Android device makers may have been filed already, or are somewhat likely to be filed in the future. That would also be consistent with Apple's German litigation style.

HTC brought declaratory judgment actions in the UK over the patents Apple asserted in Germany. It prevailed on the first four patents, and a trial over the rubber-banding patent was scheduled for this month, as well as one over four other patents for November 2013 according to Managing Intellectual Property (ManagingIP) magazine's article on the Apple-HTC cases "left behind".

Details on the dismissal wordings: Google loan patents dismissed with prejudice, all others without

Exhibit F-3 to the Apple-HTC settlement agreement contains the prepared, agreed-upon forms of dismissal. All of the dismissals of patents that truly belong to the parties are without prejudice, as I had reported. But HTC doesn't truly own Google's loan patents, and the parties agreed upon a dimissal with prejudice with respect to at least some of those. Google has a "buyback" right under its agreement with HTC, but Google is not a party to the Apple-HTC agreement.

Here are all of the dismissal wordings (not the complete filings, but the passages that address prejudice) found in the public version of Exhibit F-3 to the Apple-HTC agreement, in the order in which they appear in that exhibit and not listing German actions since Klager├╝cknahmen (withdrawals) are, under the law, without prejudice:

  • ITC investigation no. 337-TA-710 (Apple's first complaint against HTC, filed in March 2010; in December 2011, the ITC ordered an import ban over one patent; both parties appealed, with Apple seeking a broader exclusion order; in June 2012, Apple filed an enforcement complaint accusing HTC of violation of the existing order): The parties filed a "joint motion to terminate [the] investigation without prejudice and to rescind the limited exclusion order". HTC's importation of products implementing the "data tapping" patent is described in the motion as "now licensed international trade".

  • District of Delaware, case nos. 1:10-cv-166, 1:10-cv-167, 1:10-cv-544: "[...] that each and every claim and counterclaim between Apple and HTC in the above captioned matter are hereby dismissed WITHOUT PREJUDICE"

  • ITC investigation no. 337-TA-797 (investigation of Apple's second complaint against HTC): "[...] jointly move to terminate Investigation No. 337-TA-797 in its entirety without prejudice"

  • District of Delaware, case no. 1:11-cv-611: "[...] that each and every claim and counterclaim between Apple and HTC in the above captioned matter are hereby dismissed WITHOUT PREJUDICE"

  • ITC investigation no. 337-TA-808 (HTC's second complaint against Apple): "[...] jointly move to terminate Investigation No. 337-TA-808 in its entirety without prejudice"; at this stage, those of Google loan patents that HTC asserted in this investigation were no longer at issue and are not affected by the "without prejudice" wording, given that the ITC itself had already dismissed those patents, a decision that I'm sure HTC won't be allowed to appeal under settlement contract

  • District of Delaware, case no. 11-715-GMS: this is the companion lawsuit to HTC's second ITC complaint against Apple and was stayed; now "plaintiff HTC Corporation ('HTC') files this notice of dismissal of the above-captione action without prejudice".

  • District of Delaware, case no. 11-785-GMS: "[...] that each and every claim and counterclaim between Apple and HTC in the above captioned matter are hereby dismissed WITH PREJUDICE solely with respect to HTC and WITHOUT PREJUDICE with respect to Apple and to any other person or entity" (this means that Google's loan patents are dismissed with prejudice)

  • District of Delaware, case no. 1:12-cv-1004 (Apple claims originally brought in the Southern District of Florida, transferred at HTC's request): "[...] that each and every claim and counterclaim between Apple and HTC in the above captioned matter are hereby dismissed WITHOUT PREJUDICE"

  • District of Delaware, case no. 1:12-cv-1055 (Apple's antitrust action originally brought in Virginia but transferred to Delaware at HTC's request): "[...] that each and every claim and counterclaim between Apple and HTC in the above captioned matter are hereby dismissed WITHOUT PREJUDICE"

  • United States Court of Appeals for the Federal Circuit, case no. 2012-1125 (Apple appeal of ITC inv. no. 337-TA-710): "Apple Inc., the appellant in this appeal, moves to dismiss this appeal" (prejudice is a non-issue here since you can't change mind and refile an appeal later)

  • United States Court of Appeals for the Federal Circuit, case no. 2012-1126 (HTC appeal of ITC inv. no. 337-TA-710): "HTC Corporation and HTC America, Inc., appellants in this appeal, move to dismiss this appeal" (prejudice is a non-issue here since you can't change mind and refile an appeal later)

  • Civil Appeals Office, Royal Courts of Justice (UK), appeal no.s 2012/2043 and 2012/2044: "By this letter the parties jointly notify the Court that they have agreed to dispose of part of the Appeal against the Order of The Hon. Mr Justice Floyd dated July 4, 2012 [...] The parties have agreed that: (i) Apple Inc. wil not pursue the elements of the Appeal relating to HTC's infringement of the EP 2 098 948 patent; and (ii) HTC Europe Co. Ltd. and HTC Corporation will not pursue the matters raised in its respondent's notice." (this means that Apple won't try to still win an infringement ruling against HTC over a touch event model patent, but Apple can and certainly will continue to fight against Justice Floyd's findings of invalidity)

  • High Court of Justice (UK), Chancery Division, case nos. HC12 C01465, HC E02072, HC12 B02149: "agreeing that the Claim and Counterclaim be discontinued [...] without prejudice to either party's right to bring further claims, counterclaims and/or defences in relation to the subject matter of these proceedings or otherwise"

  • United States Court of Appeals for the Federal Circuit, case no. 2012-1127 (S3 Graphics' appeal of dismissal of its first ITC complaint): "S3 Graphics Co., Ltd., appellant in this appeal, moves to dismiss this appeal" (prejudice is a non-issue here since you can't change mind and refile an appeal later)

  • Northern District of California, case no. cv-11-00210 (Apple v. S3 Graphics declaratory judgment action): "[...] that each and every claim and counterclaim between Apple and S3G in the above captioned matter are hereby dismissed WITHOUT PREJUDICE"

  • ITC investigation no. 337-TA-813 (S3 Graphics' second complaint against Apple): "jointly move to terminate Investigation No. 337-TA-813 in its entirety without prejudice"

  • District of Delaware, case no. 11-862-RGA (S3 Graphics v. Apple): companion lawsuit to S3G's second ITC complaint against Apple; it was stayed, and now "plaintiff S3 Graphics Co., Ltd. ('S3G') files this notice of dismissal of the above-captioned action without prejudice."

So it's all without prejudice except for HTC's claims based on Google's loan patents.

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 and Google+.

Share with other professionals via LinkedIn: