Friday, January 25, 2013

German court finds Apple to infringe Samsung 3G patent but stays lawsuit over validity concerns

This morning Judge Andreas Voss ("Voß" in German) of the Mannheim Regional Court announced an order to stay a German Samsung v. Apple lawsuit over EP1720373 on a "method and apparatus for reporting inter-frequency measurement using RACH message in a communication system", which Samsung believes to be essential to the third-generation cellular telecommunications standard (UMTS). The case will be adjudicated only after the validity of this patent, which Apple is challenging in a nullity (invalidation) action pending in the Munich-based Federal Patent Court, has been established, which will likely take years. German courts stay infringement actions only if they identify an infringement but consider the patent-in-suit likely to be invalid. [Correction on February 1, 2013] Originally this post said that the patent would have to be considered "highly probable to be invalid" (emphasis added now). That is the standard in German patent infringement cases in which injunctive relief is sought. Here, Samsung withdrew its requests for sales bans (as explained further below), and as a result, the court saw less of an urgent need for adjudging the case, which considerably lowered the bar for a stay. Invalidation only had to be a likely outcome under these changed circumstances. German courts usually do not publish their decisions, but I have been able to find out from a confidential, reliable source. [/Correction]

While Judge Voss did not elaborate on the infringement finding and on the reasons for which his court ordered a stay, I remember from the trial that the key prior art reference cited by Apple was a version of the UMTS specifications that predated the filing of Samsung's patent application. Apple also argued that even if that document had not anticipated Samsung's claimed invention, it would render the patent obvious if combined with a Nortel change request submitted as part of the standard-setting process. At the trial Judge Voss had suggested that patent examiners make more use of standardization documents when deciding on whether to grant a patent.

Prior to today's order to stay it had already been clear for more than a month that none of Apple's products was going to be banned in Germany over Samsung's standard-essential patents (SEPs). On December 18, 2012 Samsung unilaterally withdrew all SEP-based injunction requests pending against Apple in Europe. Two days later, European Commission Vice President Joaquín Almunia, the bloc's top competition enforcer, announced the issuance of a Statement of Objections (SO) against Samsung, which validated my analysis that Samsung's withdrawal was attributable to pressure from the EU's antitrust regulator. A day later, and after almost a year of formal investigations, the SO was issued.

The implications of the EU antitrust investigation for Samsung's SEP cases in Mannheim were also addressed at the original trial that was held on September 14, 2012 and the retrial on November 23, 2012 (necessitated by a change in the composition of the panel).

The withdrawal of Samsung's injunction requests greatly reduced the threat to Apple's business but didn't render those lawsuits entirely irrelevant. Samsung is still pursuing infringement damages. Many of the initial reports on Samsung's withdrawal said or suggested that it had withdrawn "lawsuits" against Apple, but the withdrawal was limited to Samsung's prayers for injunctive relief (and only with respect to SEPs).

So far, neither Apple nor Samsung have prevailed in any of their Mannheim cases against each other (though other parties have been quite successful with their Mannheim complaints). Samsung sued Apple over three SEPs in April 2011 but couldn't show infringement for any of them. In December 2011, Samsung sued Apple over four more patents: two SEPs and two non-SEPs. In December 2012, the Mannheim court stayed one of the non-SEP cases (over a smiley input method patent). Some Apple cases against Samsung were stayed while others ended in a finding of non-infringement. Both parties appealed all final Mannheim rulings against them to the Karlsruhe Higher Regional Court. A higher regional court in Germany is the equivalent of a U.S. appeals court for a given circuit. All appeals of Mannheim rulings go to Karlsruhe, where various appeals hearings on wireless patent lawsuits are going to take place this year.

At some point the Mannheim court, which enjoys a reputation as the world's wireless patent litigation hotspot, had scheduled three Samsung v. Apple decisions for today, but two of the three decisions have been postponed. The patents-in-suit in those cases are a screen-to-speech patent (since it's not standard-essential, Samsung is still pursuing an injunction over that one) and another UMTS-essential patent.

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